PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Avient Corporation is a global formulator of specialized polymer solutions, operating in three segments with a focus on R&D and human capital [Business Overview](index=3&type=section&id=Business%20Overview) Avient, rebranded in **2020**, is a global formulator of specialized material solutions with **102** manufacturing sites and **$4.8 billion** in **2021** sales - Avient is a global formulator of specialized polymer solutions with products including specialty engineered materials, advanced composites, and color systems[4](index=4&type=chunk) - The company was formed as PolyOne Corporation in **2000** and rebranded to Avient Corporation in July **2020** following the acquisition of Clariant's global color business[4](index=4&type=chunk) 2021 Company Snapshot | Metric | Value | | :--- | :--- | | 2021 Sales | $4.8 billion | | International Sales % | ~53% | | Manufacturing Sites | 102 | | Distribution Facilities | 8 | [Avient Segments](index=4&type=section&id=Avient%20Segments) Avient operates through three reportable segments: Color, Additives and Inks; Specialty Engineered Materials; and Distribution - Avient's operations are structured into three reportable segments: Color, Additives and Inks; Specialty Engineered Materials; and Distribution[7](index=7&type=chunk) [Competition](index=4&type=section&id=Competition) Avient faces intense competition in plastics formulation and polymer distribution, based on service, innovation, quality, and price - The plastics formulation and distribution industries are highly competitive, with competition based on factors like service, performance, innovation, quality, and price[8](index=8&type=chunk) [Raw Materials](index=5&type=section&id=Raw%20Materials) Primary raw materials include thermoplastic resins, TiO2, pigments, and additives, with minor supply disruptions experienced in **2021** - Primary raw materials include thermoplastic resins, TiO2, pigments, and specialty additives. The company experienced some non-material supply disruptions and logistical delays in **2021**[10](index=10&type=chunk) [Research and Development](index=5&type=section&id=Research%20and%20Development) Avient invests significantly in R&D, employing **1,000** associates to develop new product formulations for market and sustainability needs Research and Development Investment | Year | R&D Investment (in millions) | | :--- | :--- | | 2021 | $83.2 | | 2020 | $59.8 | | 2019 | $50.6 | [Human Capital Resources](index=6&type=section&id=Human%20Capital%20Resources) Avient employs **8,700** globally, prioritizing safety, diversity, and inclusion, and has been recognized as a Great Place to Work - As of year-end **2021**, Avient employed approximately **8,700 people**, with **34%** in the U.S. and Canada, **34%** in EMEA, **25%** in Asia, and **7%** in Latin America[18](index=18&type=chunk) - The company maintained a world-class safety record in **2021** with a recordable incident rate of **0.55** per **100** full-time workers, compared to an industry average of **3.50** in **2020**[19](index=19&type=chunk) - Avient demonstrates a strong commitment to diversity, with **42%** of its Board of Directors and **64%** of the CEO's direct reports being female or racially/ethnically diverse[22](index=22&type=chunk) [Item 1A. Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) Avient faces material risks including global operating, business-specific (demand, costs, cybersecurity), capital, credit, and COVID-19 pandemic impacts [Global Operating Risks](index=9&type=section&id=Global%20Operating%20Risks) Avient's substantial international sales (**53%**) expose it to global operating risks like regulatory changes, political instability, and data privacy - The company conducts a substantial portion of its business outside the U.S., with approximately **53%** of sales in foreign countries, exposing it to various international risks[31](index=31&type=chunk) [Business Risks](index=10&type=section&id=Business%20Risks) Business risks include demand volatility, manufacturing hazards, raw material cost fluctuations, regulatory compliance, and cybersecurity threats - Demand for products can be affected by economic downturns, competition, and changes in environmental regulations[32](index=32&type=chunk) - Fluctuations in the cost of electricity, fuel, logistics, and raw materials can cause volatility in financial results[34](index=34&type=chunk) - Cybersecurity breaches and information system threats pose a risk to the security of systems, networks, and sensitive data, which could harm the business[35](index=35&type=chunk) [Capital and Credit Risks](index=11&type=section&id=Capital%20and%20Credit%20Risks) Capital and credit risks include limited access to capital, restrictive debt covenants, significant debt servicing, and goodwill impairment risk - Debt agreements contain various restrictive covenants that limit actions such as selling assets, incurring additional debt, and paying dividends[36](index=36&type=chunk)[37](index=37&type=chunk) - As of December **31**, **2021**, the company had goodwill of **$1,286.4 million**, which could be subject to impairment charges if adverse business changes occur[40](index=40&type=chunk) [COVID-19 Pandemic Risks](index=12&type=section&id=COVID-19%20Pandemic%20Risks) The COVID-19 pandemic poses ongoing risks including production shutdowns, supply chain disruptions, cost increases, and reduced customer liquidity - The COVID-19 pandemic could negatively impact the business through production shutdowns, supply chain disruptions, increased costs, and reduced customer liquidity[43](index=43&type=chunk) [Item 2. Properties](index=13&type=section&id=Item%202.%20Properties) Avient operates **102** manufacturing sites and **8** distribution facilities globally, with sufficient production capacity for the foreseeable future - The company operates **102** manufacturing sites and **8** distribution facilities globally. The majority of manufacturing sites are owned, while distribution facilities are leased[44](index=44&type=chunk) [Information About Our Executive Officers](index=15&type=section&id=Information%20About%20Our%20Executive%20Officers) This section lists Avient's executive officers as of February **4**, **2022**, including their positions and professional biographies - Lists the names, ages, and positions of the company's executive officers as of February **4**, **2022**, along with their professional backgrounds[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=17&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Avient's common shares trade on the NYSE (AVNT), with **1,543** holders of record and an active share repurchase program - The company's common stock is traded on the NYSE under the ticker AVNT[51](index=51&type=chunk) Share Repurchase Activity (Q4 2021) | Period | Total Number of Shares Purchased | Maximum Shares Remaining for Purchase | | :--- | :--- | :--- | | Oct 2021 | 0 | 5,757,472 | | Nov 2021 | 0 | 5,757,472 | | Dec 2021 | 0 | 5,757,472 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In **2021**, Avient achieved significant sales and operating income growth, driven by acquisitions and segment performance, while maintaining strong liquidity [Results of Operations](index=20&type=section&id=Results%20of%20Operations) In **2021**, sales grew **48.6%** to **$4.82 billion** and operating income rose **101.4%** to **$381.2 million**, driven by acquisition and market growth Consolidated Results of Operations (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales | $4,818.8 | $3,242.1 | 48.6% | | Gross margin | $1,099.6 | $784.3 | 40.2% | | Operating income | $381.2 | $189.3 | 101.4% | | Net income from continuing operations | $230.6 | $133.8 | 72.3% | | Diluted EPS from continuing operations | $2.51 | $1.46 | 71.9% | - The increase in sales was attributed to the Clariant Color Acquisition, growth in many end markets, and price increases to counter raw material inflation[65](index=65&type=chunk) - The effective income tax rate increased to **24.3%** in **2021** from **3.7%** in **2020**. The **2020** rate was significantly lower due to a **$18.2 million** (**13.1%**) tax benefit from a carryback of capital losses[72](index=72&type=chunk)[73](index=73&type=chunk) [Segment Information](index=22&type=section&id=Segment%20Information) All three segments, Color, Additives and Inks, Specialty Engineered Materials, and Distribution, reported significant sales growth in **2021** Segment Sales and Operating Income (2021 vs. 2020) | Segment (in millions) | 2021 Sales | 2020 Sales | % Change | 2021 Op. Income | 2020 Op. Income | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Color, Additives and Inks | $2,401.6 | $1,502.9 | 59.8% | $303.1 | $180.8 | 67.6% | | Specialty Engineered Materials | $918.9 | $708.8 | 29.6% | $132.0 | $94.4 | 39.8% | | Distribution | $1,630.9 | $1,110.3 | 46.9% | $93.2 | $69.5 | 34.1% | - The Color, Additives and Inks segment's growth was primarily driven by the Clariant Color Acquisition[78](index=78&type=chunk) - The Specialty Engineered Materials segment's growth was largely driven by high demand for advanced composite materials[79](index=79&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Avient maintained strong liquidity of **$1.09 billion** at year-end **2021**, with total debt at **$1.86 billion**, and sufficient capital for future operations Liquidity Summary (as of Dec 31, 2021) | Component (in millions) | Amount | | :--- | :--- | | Cash and cash equivalents | $601.2 | | Revolving credit availability | $485.5 | | **Total Liquidity** | **$1,086.7** | Total Debt Summary (as of Dec 31) | (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total debt | $1,858.9 | $1,872.6 | - Capital expenditures are estimated to be approximately **$135 million** in **2022**[82](index=82&type=chunk) [Cash Flows](index=24&type=section&id=Cash%20Flows) Operating cash flow increased slightly to **$233.8 million** in **2021**, while investing and financing activities used **$150.2 million** and **$114.6 million**, respectively Summary of Cash Flows (in millions) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from Operating Activities | $233.8 | $221.6 | | Net cash from Investing Activities | ($150.2) | ($1,431.6) | | Net cash from Financing Activities | ($114.6) | $982.0 | [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for environmental liabilities (**$124.5 million**), pension plans, income taxes, and goodwill impairment testing - The undiscounted accrual for probable future environmental expenditures was **$124.5 million** at December **31**, **2021**[95](index=95&type=chunk) - For pension and post-retirement plans, the company recognized a **$9.4 million** loss in **2021**, primarily due to actual asset returns being lower than assumed returns[97](index=97&type=chunk) - The annual goodwill impairment test, performed as of October **1**, **2021**, resulted in no impairment charges, with no reporting units considered to be at risk[98](index=98&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Avient manages market risks from interest rate and foreign currency fluctuations using derivative financial instruments for mitigation, not speculation - The company is exposed to market risks from interest rate changes on variable-rate debt and foreign currency fluctuations[100](index=100&type=chunk) - Derivative instruments are used for risk management purposes to mitigate these exposures, not for speculation[100](index=100&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=30&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Avient's consolidated financial statements for **2021**, along with management's report and the independent auditor's unqualified opinion [Consolidated Financial Statements](index=35&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show **2021** sales of **$4.8 billion**, net income of **$230.6 million**, and total assets of **$5.0 billion** Key Financial Highlights (Year Ended Dec 31, 2021) | Metric (in millions, except per share data) | 2021 Value | | :--- | :--- | | Sales | $4,818.8 | | Operating Income | $381.2 | | Net Income | $230.6 | | Diluted EPS | $2.51 | | Total Assets (at year-end) | $4,997.2 | | Total Equity (at year-end) | $1,790.5 | [Notes to Consolidated Financial Statements](index=41&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes provide detailed disclosures on business combinations (Clariant Color Acquisition), financing (**$1.86 billion** debt), environmental liabilities (**$124.5 million**), and segment information - The purchase accounting for the **$1.4 billion** Clariant Color Acquisition was finalized as of June **30**, **2021**, resulting in **$561.2 million** of goodwill allocated to the Color, Additives and Inks segment (Note **2**)[160](index=160&type=chunk)[163](index=163&type=chunk) - As of December **31**, **2021**, total debt was **$1.86 billion**, consisting primarily of senior notes and a senior secured term loan. The company was in compliance with all debt covenants (Note **6**)[179](index=179&type=chunk)[181](index=181&type=chunk) - Environmental liabilities totaled **$124.5 million** as of December **31**, **2021**, with the majority (**$113.2 million**) related to the Calvert City remediation site (Note **12**)[211](index=211&type=chunk) [Item 9A. Controls and Procedures](index=68&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December **31**, **2021**, with no material weaknesses - Management concluded that the company's disclosure controls and procedures were effective as of December **31**, **2021**[249](index=249&type=chunk) - Management's annual report on internal control over financial reporting concluded that such controls were effective as of December **31**, **2021**, with no material weaknesses identified[250](index=250&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=70&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information from the **2022** Proxy Statement regarding directors, audit committee, and corporate governance - Information regarding directors, the audit committee, and corporate governance is incorporated by reference from the **2022** Proxy Statement[255](index=255&type=chunk) [Item 11. Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference executive and director compensation information from the **2022** Proxy Statement - Information regarding executive and director compensation is incorporated by reference from the **2022** Proxy Statement[256](index=256&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=70&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) This section details equity compensation plans, including **2.5 million** securities to be issued and **2.34 million** available for future issuance Equity Compensation Plan Information | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 2,501,061 | $35.64 | 2,340,343 | | Total | 2,501,061 | $35.64 | 2,340,343 | PART IV [Item 15. Exhibit and Financial Statement Schedules](index=72&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Annual Report on Form **10-K** - Lists all financial statements and exhibits included in the Form **10-K** filing, such as credit agreements, incentive plans, and required SEC certifications[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)

Financial Performance & Growth - Avient reported full year 2021 sales of $4.819 billion, a 27% increase compared to the pro forma full year 2020 sales of $3.783 billion[13] - Adjusted Operating Income for full year 2021 was $429 million, a 27% increase compared to the pro forma full year 2020 Adjusted Operating Income of $308 million[13] - The company achieved record margins in 2021 despite unprecedented supply chain challenges[16] - Avient anticipates $75 million in run-rate synergies from the Clariant Color integration by the end of 2022[55] - Adjusted EBITDA for full year 2021 was $581 million compared to $457 million in 2020[14] Clariant Color Acquisition - The acquisition of Clariant Color was completed on July 1, 2020, for $1.45 billion[19] - $54 million of synergies were realized in 2021 from the Clariant Color acquisition[19] - The synergy target for the Clariant Color integration has been increased to $85 million[23] Sustainability - Revenue from sustainable solutions grew 16% in 2021[28] - Avient expects revenue from sustainable solutions to grow 8-12% in 2022[28] Outlook - Avient projects 15% adjusted EPS growth to $3.50 in 2022[55] - The company forecasts adjusted EBITDA of $635 million for 2022, representing 9% growth above 2021, or 11% excluding the impact of foreign currencies[55]

Avient Corporation (NYSE:AVNT) Q4 2021 Earnings Conference Call February 8, 2022 8:00 AM ET Company Participants Bob Patterson – Chairman, President and Chief Executive Officer Jamie Beggs – Senior Vice President and Chief Financial Officer Joe Di Salvo – Vice President, Treasurer and Investor Relations Conference Call Participants Michael Sison – Wells Fargo Aziza Gazieva – Fermium Research Michael Harrison – Seaport Global Securities Benjamin Kallo – Baird Bob Koort – Goldman Sachs Group Kristen Owen – Op ...

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Avient Corporation (NYSE:AVNT) Q2 2021 Earnings Conference Call July 30, 2021 8:00 AM ET Company Participants Joe Di Salvo - Vice President, Treasurer & Investor Relations Bob Patterson - Chairman, President & Chief Executive Officer Jamie Beggs - Senior Vice President & Chief Financial Officer Conference Call Participants Frank Mitsch - Fermium Research Mike Sison - Wells Fargo Bob Koort - Goldman Sachs Angel Castillo - Morgan Stanley Ben Kallo - Baird Colin Rusch - Oppenheimer Mike Harrison - Seaport Rese ...

Avient Corporation (NYSE:AVNT) Q1 2021 Earnings Conference Call April 30, 2021 9:00 AM ET Company Participants Joe Di Salvo - VP, Treasurer and IR Bob Patterson - Chairman, President and CEO Jamie Beggs - SVP and CFO Conference Call Participants Bob Koort - Goldman Sachs Mike Sison - Wells Fargo Frank Mitsch - Fermium Research Angel Castillo - Morgan Stanley Colin Rusch - Oppenheimer Ben Kallo - Baird Lawrence Alexander - Jefferies Mike Harrison - Seaport Global Jaideep Pandya - On Field Research Operator G ...